INFILL IMPACT FUND
The Innovative Solution to California’s Housing Crisis
Legal Disclaimer
This information is for illustration and discussion purposes only. It is not intended to be, nor should it be construed or used as investment, tax, or financial advice, any recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in this company or in any other investment or project managed or advised by Sundae, Inc., SDRE Homebuyers LLC or Reditus Fund I, LLC. Any offer or solicitation of an investment may be made only by delivery of the Sundae, Inc., SDRE Homebuyers LLC or Reditus Fund I, LLC and its affiliates confidential offering documents (collectively, the "Offering Documents") to accredited and/or sophisticated investors. Prospective investors should review carefully and rely solely on the Offering Documents in making any investment decision. Targeted returns discussed in this presentation are used for measurement orcomparison purposes and only as a guideline for prospective investors, shareholders or other to evaluate this opportunity. Targeted returns should be evaluated over the time period indicated and not over shorter periods. No representation is made that Sundae, Inc., SDRE Homebuyers LLC or Reditus Fund I, LLC will or is likely to achieve its objectives, that Sundae, Inc., SDRE Homebuyers LLC or Reditus Fund I, LLC business plan will be successful, or that an investor in Sundae, Inc., SDRE Homebuyers LLC or Reditus Fund I, LLC, and its affiliates will or islikely to achieve results comparable to those shown or will make any profit or will not suffer losses or loss of principal. An investment in Sundae, Inc., SDRE Homebuyers LLC or Reditus FundI, LLC involves risks, as disclosed in any final offering docs.
THIS PRESENTATION INCLUDES OR MAY INCLUDE CERTAIN STATEMENTS, ESTIMATES, AND FORWARD-LOOKING PROJECTIONS WITH RESPECT TO THE ANTICIPATED FUTURE PERFORMANCE OF THE COMPANY. SUCH STATEMENTS, ESTIMATES, AND FORWARD-LOOKING PROJECTIONS REFLECT VARIOUS ASSUMPTIONS OF THE MANAGER THAT MAY OR MAY NOT PROVE TO BE CORRECT OR THAT MAY INVOLVE VARIOUS UNCERTAINTIES. NO REPRESENTATION IS MADE, AND NO ASSURANCE CAN BE GIVEN, THAT THE COMPANY CAN OR WILL ATTAIN THE MANAGER'S PROJECTED RESULTS. ACTUAL RESULTS MAY VARY, PERHAPS MATERIALLY, FROM SUCH PROJECTIONS.
Any statements made in this presentation are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.
All investments, including real estate, is speculative in nature and involves a risk of loss. We encourage any investors to invest carefully. We also encourage investors to get personal advice from your professional investment advisor, CPA or other trusted financial advisor and to make independent investigations before acting.
IT IS IMPORTANT YOU UNDERSTAND THAT WHILE WE ARE PROVIDING PROJECTIONS BASED ON THE FACTS AND FIGURES AVAILABLE, NO ONE CAN TRULY PREDICT THE FUTURE.
01 San Diego Has a Problem: Housing Availability & Affordability
Housing affordability is an issue for at least half of San Diegans
50% of San Diegans cannot find market-rate rental housing they can afford
60% of San Diegans cannot afford home ownership
Housing affordability impacts 100% of low-income residents and a large portion of moderate-income households
~70% of moderate-income households cannot afford home ownership, and >30% cannot afford rent
San Diego Rents and Home Prices have exploded in the last 4 years
Source: Redfin
Source: Redfin
Not only are housing costs up, but inventory is <⅔ of 2019 levels
Source: Redfin
San Diego
rental
vacancy is one of the lowest in the nation
Source: US Census Bureau (CA & US), Marcus & Millichap 2024
National Investment Forecast
San Diego needs 15,000 new units per year to keep up with growth. Only 3,200 will be delivered in 2024.
Source: San Diego Association of Governments
“San Diego is only going to produce approximately 3,200 housing units this year (the goal to keep up with demand is 15,000 units). This number is approximately 1% of the total housing stock and ADUs are included in this figure. Very few units will be produced for the next few years as the city of San Diego only approved 5,300 housing units in 2022. I doubt all of these will be built.”
Austin Ray Huffman First Vice President Investments 2024
These trends will be pressured even further as job growth accelerates
5,000 New Apple jobs with a new 45 acre campus
3,000 New jobs at Horton Plaza, a mall-to-office development in Downtown San Diego
3,500 New biotech jobs from IQHQ, a 200,000 sq. ft. Class A office development
700 New high paying jobs at Amazon in a 123,000 sq. ft. space in UTC
02 Changes to Residential Development Laws are Addressing San Diego’s Affordability Problem
New California laws provide ample incentive for development
AB 68 & AB 881
1/1/2020
Streamlines and improves the ADU development processes (limits requirements for off-street parking, owner-occupancy, setbacks and requires action on ADU applications within 60 days)
SB 13
1/1/2020
Prohibits the enforcement of parking standards for ADUs within ½ mile of public transit
AB 670 & AB 671
1/1/2020
Prevents HOAs from banning or unreasonably restricting the construction of ADUs on single-family residential lots
SB 9
1/1/2022
Allows for the addition of up to 4 homes on an existing parcel
AB 2221
1/1/2023
Removes limits on front setbacks and makes it easier to install ADUs in community associations
SB 6
7/1/2023
Allows housing development on commercial property
AB 1033
1/1/2024
Allows owners to sell ADUs separately from their primary residence
SB 10
1/1/2022
Provides cities with an easier path for "up-zoning" residential neighborhoods close to job centers, public transit, and existing urban areas
AB 2011
7/1/2023
Creates approval for affordable housing on commercially-zoned land
With even more favorable laws on the horizon in
California
California State Wide - PENDING
AB 1332 - Already passed, takes effect Jan 2025; allows for a master plan approved in one jurisdiction to be approved in other jurisdictions with a 30 day required approval timeline
SB 1123 - In 2nd committee review; allows for subdivision in lots under 5 acres with less oversight
SB 1211 - In 2nd committee review; allows for 8 ADUs per multifamily lot instead of 2
SB 1164 - In 1st chamber review; would exempt ADUs constructed between 1/1/2025 and 1/1/2030 from property tax assessments for a period of 10 years
San Diego is leading the way to accommodate growth
“San Diego is the only city in the region that updates its zoning code annually with a large batch of policy changes.”
-San Diego Union Tribune
Specific to San Diego
City of San Diego Executive Order 2023-1
Expedites the City approval process of affordable housing projects to 30 days
New Zoning Laws:
Sustainable Development Areas (SDAs) & Transportation Priority Areas (TPAs)
Affordable home density bonus program
The race is on, but little more than a dent has been made
Since 2021, less than 60% of permit applications have been issued
Source: SANDAG Open Data
Source: sandiego.gov
“I can say the state of our city is rising[...] Rising to build more housing. Rising up against the urge to say ‘no’ because change is scary. Rising to meet the expectations of all our neighborhoods.”
Todd Gloria, Mayor of San Diego
Our
partnership is leading the charge, and
we have a sizeable head start
SDRE has submitted the majority of permits for projects over 5 units
● So far 49 projects permitted for a total of 641 units
● Upcoming 28 projects for a total 535 units.
Only 76 projects have been approved by the city for 5+ units
SDRE’s projects represent ~65% of the total activity in this segment
Our Fully Integrated Team is Leading the Charge
Integrated real estate partnership
Integrated real estate partnership
Josh Stech
Co-Founder and CEO, Sundae
Founding Partner, LendingHome(Kiavi)
Cofounder, Purpose Built Investments
$1B+ in Debt & Equity Capital Raised
Stanford BA Economics
Stanford BA Spanish
Founder and CEO, SDRE
Co-Founder PRO-CAL
Co-Founder, Vertical MVMT
X ADU units developed
Started in Property Mgmt at 18
15 years in SD Real Estate
Partner & Director, Fletcher Cove Capital
CEO, Investors 1031 Exchange
President Capital Markets, IMH Companies
$500M of successfully executed real estate investments
28 years of experience with Fiduciary Services
Supported 1,000+equity placements
Integrated real estate partnership
Co-Founder, Vertical MVMT
Brian Doyle President, SDRE
Founder, KL Drafting & Design
Processed over 1,500 permits through the county of San Diego
30+ years of construction experience
Petco Park, Indian Wells Tennis Garden, Hotel Del Coronado
CA State License Board A and B for 18 years
35 years in multifamily development
Led IMH Companies’ Multifamily Development Operations
COO of William Lyon Homes
Western Area President, Taylor Morrison Homes
Together we create a fully integrated value chain
Underwriting: Proven track record for precise forecasting using the best tools available in the industry
Sourcing: Targeted, multi-channel outreach towards lots with optimal development potential
Permitting: Intimate familiarity after processing over 1,500 permits through the county of San Diego
Leasing: 100% occupancy on first 2 large projects with rents exceeding expectations on all unit types
Design & Engineering: Over 50 years experience in a team with a sector-diverse background
Building: Precision execution with attention to detail and strict adherence to costs and timelines
Sales: Best in class team with millions in transactions closed
Examples of completed projects by our team
Total Cash Invested
Total Project Return
Project IRR Equity Multiple
36th Preece Iroquois N Elman
These projects have created housing solutions for highly qualified tenants in need of a better option
Savannah
DOB: 1995
Employer: Rady Children’s Hospital
Income: $107,000
Credit Score: 737
Delinquency
History: 0
DOB: 1963
Employer: Rescue Rooter
Income: $160,000
Credit Score: 687
Delinquency
History: 0
Ashwin
DOB: 1971
Employer: Enable Technologies, Inc.
Income: $260,000
Credit Score: 819
Delinquency
History: 0
DOB: 1964
Employer: US Naval Research Laboratory
Income: $153,000
Credit Score: 775
Delinquency
History: 0
04 Investment Opportunity: Infill Impact Fund
Staggered Project Status → Quick, Consistent Returns
Balancing Demand with Returns →1/1 Unit Focus
Single family home purchased for $1,100,000 on May 15th, 2022
Beds
Full Baths 1,385 Sq. Ft. Home
Sq. Ft. Lot
Project Example: 4674 Firestone Street, San Diego
Click here to watch video
Project Example: 4674 Firestone Street, San Diego
● 23 months from acquisition to CofO; currently for sale, Marcus & Millichap’s most active San Diego commercial listing
● 12 Units: 11 one bed/one bath, and 1 three bed/two bath
○ Converted house from a 4 bed/3 bath into 2 units (3/2 and 1/1)
○ Added 10 ADUs in backyard: all 1 bed, 1 baths
● Upscale finishes allowed for easy leasing and 100% occupancy
○ 3 months to lease entire complex; waited to set comps!
12 Units
Project Example: 4674 Firestone Street, San Diego
Equity $30,778,462 Total Profit $45,662,137 Total Resale Value $125,850,904 -Total Project Costs $80,188,767
Investment Opportunity
0% Management Fee
No fund-level management fee, pure expense pass through
Investor Protections
1st 20% IRR to LPs; next 20% IRR to GPs; 50/50 split between 40-60% IRR; GP receives upside above 60% IRR
2 Year Investment Horizon
Q1 2025 to Q4 2026, plus 1 year optional extension at GPs discretion
5-10% GP Commitment
Putting our money where our mouth is
25-30% Investor IRR
Exceptional returns; distributions along the way
$30M Total Equity Raise
Equity will be levered up through construction debt
$250K Minimum Investment
Prioritizing fewer, bigger investors
50% Subscribed
Existing investors + GP commitments;Target close 30-60 days
INFILL IMPACT FUND